Aultman, Miller & Co. v. Holder

SWAN, District Judge. The questions arising in this case have been argued with great learning and ability by counsel, and, although the discussion has taken a wide range, it has left for determi-na tion but two inquiries: (1) Was the contract sued upon made in this state? (2) Is the statute upon which the defense is founded a regula tion of commerce obnoxious to the constitutional grant of the power over that subject conferred upon congress? In regard to the first of these questions, it will he noticed that the provision of the statute upon which reliance is had for the avoidance of the defendant's liability for the sum found due from him to the plaintiff limits its penalty to “contracts made in this state after the first day of January, 3894.” This contract was made, it is admitted. after that date. What was the locality of its execution? It did not become a contract until all the parties executed it. By its express provision it was not to he valid until countersigned by the agent of the plaintiff at Lansing, and approved at Akron, Ohio. This latter requisite — the approval of the plaintiff - -is the crowning act of its consummation, as expressing the agreement of the parties. It, therefore, was not made until, by plaintiff’s approval, it was perfected and adopted. Until then it was an imperfect obligation, having no force whatever. The act which gave it vitality was [470] performed outside of the state of Michigan, i. e. in the state of Ohio. It seems clear, therefore, that it was not a contract made in this state, within the prohibition of the statute. The question of construction of the language of the statute is analogous to that arising upon the alien labor acts, which have been the subject of much discussion in the federal courts. In cases founded on those acts, a vital element of the offense is the making of a contract in a foreign country with a nonresident alien, previous to the immigration or importation of such alien into the United States, to perform, labor or service in this country, and in pursuance of which such nonresident alien comes to the United States and enters upon the performance of the contract. There, as here, the character of the act is made to depend upon the locality of the. execution of the prohibited contract. It is perfectly lawful, notwithstanding the alien labor acts, to contract with an alien within the jurisdiction of the United States. U. S. v. Craig, 28 Fed. 795, 799; U. S. v Edgar, 45 Fed. 44; same case on error, 1 C. C. A. 49, 48 Fed. 91. Thus, m the Michigan statute, no penalty is directed against the execution of a contract outside of the state by a corporation which has not complied with the provisions of the acts of 1891 and 1893. The inquiry, therefore, is not by what law the contract is to be construed, — whether that of the place of its execution or that of its performance, — or of the form in which suit may be brought upon it. The single question is, where was it executed ? And upon the admitted facts of this case, evidenced by the stipulation, the concessions of counsel, and the fair construction of the clause “and approved at Akron,” but one answer can be given to this inquiry. It became, the contract of the parties at Akron, Ohio, and was not made in the state of Michigan, within either the language or the spirit of the act of the legislature pleaded in defense. Giving to the language of the act its natural and obvious meaning, the phrase “made in the state of Michigan” can have but one interpretation, and must be held to designate contracts there perfected by the assent of all parties. It is not necessary to invoke the rule that a penal act is to be strictly construed, for the language employed has excluded all doubt of the intent of the legislature. The contract sued upon is not avoided by the act of 1893. 2.- Upon the second question, as to the constitutionality of the state statute, there is, in my judgment, as little doubt as upon the first.' By the contract sued upon the defendant “is hereby authorized to sell Buckeye mowers, reapers, and binders, and extra parts thereof, in the following territories, viz.: Laingsburg and vicinity and Elsie and vicinity, including the townships of Washington and Elba, in Gratiot county, and Chapin in Saginaw county, and the west half of Fairfield in Shiawassee county, for and during the season of.1894” The defendant, therefore, was not a resident local agent of the plaintiff, and, although selling on commission, was really, as the contract contemplates, nothing more than an itinerant vendor in the territory specified. The fact that the company had a warehouse at Lansing, where it stored its implements, and the necessary “repairs” or parts of the machines which it manufactured and [471] sent here for sale, in order that it might meet the demands of those having its machines to supply such repairs or parts, is immaterial in this case. Without doubt, property so stored and kept within the state of Michigan, for the convenience of the company and the promotion of its business, in affording facilities to its customers for the purchase and repair of the implements which it manufactured' and sold, unless these were merely in transit for delivery to customers here, would authorize the state to tax such property for the protection it received, but the right to taxation of such property is notin question here. The state statute really imposes a fax upon the corporations included within its provisions for the privilege of selling their wares in Michigan, and therefore is obviously a tax upon interstate commerce within tbe provisions of the federal constitution, and the decisions of the supreme court of the United States. It is equally so regarded by the supreme court of the state, and in Coit v. Sutton, 60 N. W. 690, decided in October, 1894, the supreme court of Michigan, in passing upon this very statute, so decided, holding that it imposed a tax “upon the occupation of the corporation, with a provision that all its contracts shall be void until the tax is paid, which, if enforced, would embarrass plaintiff in its commerce with noninhabitants of Michigan. It must, therefore, be held that the act in question does not apply to foreign corporations whose business within this state consists merely of selling through itinerant agents, and delivering commodities manufactured outside of this state.” The opinion cites many decisions of the supreme court of the United States upon the construction of the commerce clause of the constitution, which all sustain this conclusion. In addition to these, the cases of Crutcher v. Kentucky, 141 U. S. 47, 11 Sup. Ct. 851, Brennan v. City of Titusville, 153 U. S. 289, 14 Sup. Ct. 829, and Covington & C. Bridge Co. v. Com., 154 U. S. 204, 14 Sup. Ct. 1087, in which cases the opinions of the court are delivered respectively by Mr. Justice Bradley, Mr. Justice Brewer and Mr. Justice Brown, review fully the authorities upon this question, and render unnecessary any lengthy discussion of the question upon principles. The fact that the act of 1893 (Laws 1893, p. 82) does not discriminate against foreign. corporations does not exempt; it from the charge of being an interference with interstate commerce. This point is so fully discussed in several of the cases cited supra that it need not here be elaborated. Indeed the decision of the supreme court of the state of Michigan leaves nothing to be said in support of the statute as applied to this case. There is nothing in the stipulation of facts which takes the case outside of the effect of that decision. The judgment must be entered for the plaintiff for the sum of $5,052.56, with interest at 6 per cent, from November 3, 1894.